2019 S&P Outlook

Earlier this year (2018) I calculated the February low would be the low for the year. However with all the political turmoil and social agitation, (trade wars, interest rate rise and whatnot) put that view in jeopardy!  If we’re fortunate and by some miracle we get the trade war squared away, and the Federal Reserve holds rates steady, the S&P 500 index might just keep from falling below the February low before the end of 2018! However, I hold little hope of that happening!

Using the same calculations as in the past I have a target high of $2975 for the S&P 500 index in 2019.  In other words, it’s very likely we’ll see a retest of the Sept./Oct. 2018 high sometime in 2019, if everything I use to calculate targets remains the same. If by chance some of the fundamentals change then I’ll need to recalculate the target. But as of this writing (12-05-18), I’m looking for a retest of the previous 2018 high at some point in 2019!

Should the 2018 February low hold the probability we’ll see a sideways trending index in 2019 increases! If February's low doesn't hold then 2350 is what I calculate as the low for 2019!

Some key support levels to watch on further down moves are:

2629 to 2603 = 90 week moving average and pivot support level.

2532 = February Low.

2516/2511 = Fib 23.6% retrace and confluence area. Should see strong support about this level!

2379 = Fib 50% retrace of 2016 low to 2018 high. Should the index drop to this level I suspect this area will hold. I really don’t expect the index to fall this far but it really all depends on how events play out in 2019.

Analyzing the 4 stochastic lines in the weekly chart!

Black line: The black line is the fastest setting. It’s oversold currently, suggesting we should see advances soon probably within the next two weeks. That’s encouraging if short term bullish!

The black line just crossed above the red signal line but still remains below the blue intermediate weekly line.

Confidence for the long term? 

We’ll see advances held in check until the black line makes the simple crossover above the blue. As it stands now we’re likely to see some advances in the next two or three weeks, but need to hold off  longer term optimism till after the crossover, if and when that happens!

Troubling for the longer term is the thicker slower stochastic orange line setting. It really doesn’t look good at this writing! It suggests the index has the potential of dropping over the next few months out with counter trend advances. Should that scenario occur it would be best to sell rallies until such time it turns in a more northerly direction!

To recap:

The probability of seeing the index trending sideways in 2019 is high.

However the downside is favored for now, to a few months out, with short term counter trend advances.

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